EU trade reprisals to target US coal, cars, chemicals

Europe could target American coal, cars and chemicals and firms like Caterpillar and Xerox if Washington imposes a threatened tariff on autos, a trade talks source told AFP Friday.

European officials are drawing up a list representing 20 billion euros ($22.7 billion) in retaliatory tariffs and are now getting into the detail of products produced by the likes of Ford, General Motors and Tesla.

A source in Bucharest, where EU trade ministers met Friday, said the final list could still evolve but targets products manufactured in the United States rather than those made elsewhere by US brands.

Europe would prefer to sign a wide-ranging trade deal with US President Donald Trump's administration, but stands ready to retaliate if he makes good on his threat to target EU car exports.

The hunt for a trade deal was part of a July truce between Trump and European Commission President Jean-Claude Juncker in which the US pledged to back off the auto duties and avert a trade war.

Debate over the contours of such a deal almost immediately underlined deep transatlantic divisions, however, with the US insisting that farming be included -- an idea rejected by the EU.

But even Europe is divided over pursuing the deal.

Germany is eager to placate Trump in order to avoid the auto tariffs that would punish the country's cherished exports, a prospect Chancellor Angela Merkel labels "frightening".

France however is dragging its feet, fearing that entering trade negotiations with Trump could fire up domestic opposition just months ahead of European elections, set for May 22 to 26.

Paris is especially wary after the failure of talks on TTIP, a far more ambitious transatlantic trade plan, which stalled amid fears a deal with Washington would undermine EU food and health standards.

The commission, which handles trade negotiations for the EU's 28 member states, has proposed a mandate for a "limited" trade accord that ministers in Bucharest considered.

"We could do this quite quickly if member states agree," said EU Trade Commissioner Cecilia Malmstrom ahead of the talks in Bucharest.

With the deal, "we would have something that we could start building trust from (with the US), because we need to build that trust," she said.

A frustrated Trump threatened Wednesday to impose tariffs on European auto imports if the deal did not happen.

Trump's renewed threat came after the US Commerce Department delivered a report that sources said found European car imports constitute a national security threat to the United States.

The report could set the stage for the White House to impose the tariffs within 90 days.